Money & Finance › Markets of the world › The US office market: remote work and record vacancy
Los Angeles office market (about 25% vacant)
Q2 2026· Asset or instrument
Fact, law or dataA rule, statute, definition or measured number.
Greater Los Angeles office space was about a quarter vacant in Q2 2026 (CBRE), among the weakest big US markets.
See it on the Money & Finance map →How it works
CBRE put Greater LA office vacancy at about 25.7% in Q2 2026, up 1.5 points in a year, as tenants gave back a net 432,000 square feet in the quarter. Other brokers report lower rates (Kidder Mathews: 16.4% direct vacancy) because they count sublease space and buildings differently. Downtown and Koreatown towers are weakest.
Why it matters
Vacancy drives rents, concessions, appraisals and refinance proceeds; in LA it also lies behind high-profile CMBS defaults and steep tower price cuts.
Facts, rules and data
Quarterly broker surveys from CBRE, Cushman & Wakefield, Kidder Mathews and Colliers, CoStar data, and recorded sale prices of distressed towers.
Debates and risks
Brokers' figures differ by several points; whether LA's slow return to office, entertainment-industry cuts and the 2025 wildfires delay recovery is debated.
Connections (3)
▸Los Angeles office market (about 25% vacant) includes the towers behind Jamison Properties' CMBS office defaults in Los Angeles (2024–26)Fact, law or data
The connection
Jamison's troubled loans sit on Koreatown and Downtown towers, two of LA's weakest office areas. As tenants shrank or left, rents and occupancy fell, appraisals dropped sharply, and 10-year CMBS loans from around 2014 could not be refinanced at maturity. Market vacancy explains why no lender would refinance at the old loan amounts.
When and why
Wilshire Boulevard in Koreatown and Downtown Los Angeles, 2024–26; special servicers took over about four loans totaling roughly $230 million.
How we know
CMBS servicer reports summarized by Morningstar Credit and trade press, showing Equitable Plaza's appraisal falling from $150.5 million to about $58 million.
Debates and risks
How the remaining loans end, through extension, sale or foreclosure, and whether bondholders lose money, were not public at last report.
▸Los Angeles office market (about 25% vacant) sets the leasing backdrop for Archetype: a bank refinance of a suburban office buildingMainstream view
The connection
A bank refinancing a suburban office building starts with the local market: submarket vacancy, asking rents and concessions shape the appraisal and the bank's view of how fast empty space will lease. Where vacancy is near a quarter of space, lenders underwrite conservative rents, larger leasing reserves and smaller loans.
When and why
Los Angeles suburban submarkets, 2024–26, as community and regional banks refinance maturing office loans.
How solid is the link?
Appraisals rely on submarket vacancy and rent comparables, and bank credit memos typically cite broker market reports when sizing office loans.
Debates and risks
Whether appraisers and banks overweight weak downtown data when valuing suburban buildings, whose leasing has sometimes held up better, is debated.
▸Los Angeles office market (about 25% vacant) is among the hardest hit by Commercial real estate stress (2023–)Fact, law or data
The connection
LA combined the national shocks, remote work and higher rates, with local ones: entertainment-industry cutbacks, a slow return to office, and the City of Los Angeles's Measure ULA transfer tax, in force since April 2023, of 4–5.5% on sales above about $5 million. Vacancy climbed toward a quarter of space, tower values fell, and office loan defaults followed.
When and why
Downtown, Koreatown, Hollywood and West Los Angeles, 2023–26; Brookfield defaulted on two Downtown tower loans in February 2023.
How we know
Broker vacancy surveys, Trepp and MSCI distress data, and recorded sale prices of distressed towers, many far below prior loan balances.
Debates and risks
Whether Measure ULA meaningfully reduced sales is debated; supporters say it funds housing, critics say it freezes large deals.